Gibraltar Workplace Pensions – Complete Guide 2025

May 13, 2025
In Blog Gibraltar

Contact Darren Whitley

If you’re operating a business in Gibraltar, the Private Sector Pensions Act 2019 is legislation that you need to have firmly on your radar.

The Act, which was introduced to ensure that all eligible employees in Gibraltar’s private sector have access to a pension scheme, has been a reality for the Gibraltar’s largest employers since 2021. And now, with a phased implementation to assist businesses to prepare, the deadlines are fast approaching for Gibraltar’s medium and smaller employers.

This article is intended to walk you through the legislation, set out what actions you need to take and when, and explain how Sovereign can help you stay compliant and identify and establish the most suitable pension scheme for your business and employees.

Key Dates

The rollout for Gibraltar Workplace Pensions is being implemented in five stages, based on company size:

Enterprise (251+ employees) – 1 August 2021
Large (101 to 250 employees) – 1 July 2022
Medium (51 to 100 employees) – 1 July 2025
Small (15 to 50 employees) – 1 July 2026
Micro (14 or fewer employees) – 1 July 2027

Who needs to be enrolled?

Under the Act, businesses must automatically enrol any eligible employee into a compliant occupational pension scheme. Eligibility generally applies to employees who:

Are over the age of 15.
Have been employed in the business for one year or more.
Earn gross earnings from that employment of £10,000 or more per year.
Are not already part of another approved pension scheme.

If any employees meet these criteria, as the employer you are responsible for enrolling them into a compliant pension scheme and the making the required contributions into that scheme.

An employee can opt-out. Should they choose to do so, the employee must complete an opt-out form that the employer must submit to the Pensions Commissioner.

What are employers and employees expected to contribute?

The Act mandates a minimum employer contribution of 2% of gross earnings annually (i.e. basic pay before deductions), although businesses can choose to contribute more if they wish.

Employees are also required to contribute a minimum 2% of their gross earnings.

Who supervises compliance?

The Gibraltar Financial Services Commission (GFSC) is appointed as Pensions Commissioner under the Act to ensure that the requirements are complied with by both employers and the administrators of pension schemes. Employers are required to maintain accurate records and demonstrate that they have fulfilled their obligations under the law. Failure to comply could lead to penalties, so it is essential to have a compliant, well-administered scheme in place.

How is the pension scheme to be invested?

Individuals have different attitudes to risk, different investment timeframes, and different levels of investment knowledge and expertise.

Members of pension schemes administered by Sovereign Pension Services are provided with a choice of investment funds, each with a different risk rating depending on the member’s growth objectives.

All our funds are run by highly regulated investment managers with validated track records. These investment managers are also constantly monitored by Sovereign Wealth, our stand-alone, fully regulated asset management subsidiary in Gibraltar.

Sovereign Wealth will ensure that investment choices are matched to the investment parameters of the scheme and the members’ tolerance for risk. The team at Sovereign Wealth is also available to employers and employees, providing peace of mind to both.

Choosing the right pension scheme for your business

A qualifying pension scheme, as defined in the Act, must be an occupational pension scheme in Gibraltar that is either registered with or authorised by the GFSC or a personal pension scheme that is operated by a firm holding the necessary permission from the GFSC.

Given the broad range of businesses covered by the Private Sector Pensions Act, there is no ‘one-size-fits-all’ solution, which is why Sovereign offers two distinct options, depending on your needs:

Pre-Approved Scheme – cost-effective and ready to go
We have a multi-employer approved occupational pension scheme that meets specific standards and allows multiple employers to auto-enrol their eligible employees into it. Designed for simplicity and speed, this is the ideal solution for smaller businesses or those looking for a quick and affordable set-up.Under the Private Sector Pensions Act, all pension schemes are required to include certain external oversight and administration fees to ensure compliance. In our pre-approved scheme, these required external fees are shared among all participating businesses, creating a highly cost-effective solution.

Bespoke Scheme – tailored to your business
Our bespoke option allows for customisation of key elements of the occupational pension scheme to better align with your business’s structure and culture. The trust deed and rules can be defined to reflect your preferences such as normal retirement age, qualifying service period, fee-paying structure and scheme financial reporting. This level of customisation comes at a higher cost due to the additional administrative and governance work required, but it offers the flexibility that larger or more complex businesses often need.

How to set up your compliant pension scheme

Sovereign will make the set-up process straightforward. Firstly, contact us to discuss your needs and tell us how many employees you have and which of them meet the eligibility criteria. Based on the scale and scope of your business, we will then be able to help you choose the right scheme and guide you through the steps to set it up.

We typically advise employers to allow at least three months to get a pension scheme fully up and running. But the process will not consume your time and resources throughout the entire period. Sovereign will handle the heavy lifting, leaving you to stay focused on running your business.

Managing your scheme

Once your occupational pension scheme is active, the ongoing management is uncomplicated for employers. Each month, you are required to log into our online Employer Platform, complete the contributions spreadsheet and submit it through the platform. You will also have access to a range of dynamic reports that you can run and download or export.

For businesses using EasyPay for payroll services, the process is even simpler. Thanks to our integration with EasyPay, employers only need to click a single button each month to ensure contribution details are up to date.

Employees can also oversee and manage their own pension information directly in a secure and convenient environment through our secure Member Self-Service (MSS) portal. Employees can stay connected to their pension and have access 24 hours a day so that they can view and export information including:

Balance enquiry/valuation
Investment information
Contribution information
Employee booklet
Pension annual statements.

Why choose Sovereign?

The Sovereign Group has been providing pensions and retirement solutions for over 30 years, and we administer schemes from three of our 20 international offices. We serve a global client base ranging from small and medium-sized enterprises (SMEs) to multinational corporations. In 2024, we were selected to administer the Guernsey government’s mandatory pension scheme, Your Island Pension.

Sovereign provides the perfect mix of digital delivery and people support. Our Gibraltar occupational pensions team brings more than 120 years of combined experience in designing, establishing and managing workplace pension schemes in Gibraltar, making us one of the most knowledgeable providers in the region.

Sovereign Pension Services is here on your doorstep to work closely with employers to support the launch and administration of their scheme. We will provide your team with training on the processes and portal, and we will engage with your employees on the rules, investment options, portal and actions required to help them identify with their benefit.

Contact Darren Whitley

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